Free Movement Of Goods 1 Fiscal Notes
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Free Movement Of Goods 1 Fiscal Revision
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EU Law: Free Movement of Goods 1 - Fiscal Barriers
Article 26(2) TFEU provides for four freedoms of the internal market: 'the free movement of goods, persons, services and capital'. The rationale for free movement of goods: the objective of the Treaties is the removal of obstacles to the free circulation of goods between MSs. Essential for the achievement not only of the internal market itself, but also for the achievement of a customs union that economists regard as an essential step for the integration of markets. A 'customs union', creation provided for in Art 28(1) TFEU = an agreement between States to abide by 2 principles: o Internal aspect of a customs union: a 'free trade area' with no customs duties; o External aspect: and a system for the charging of a 'common customs tariff' on goods coming into the free trade area from other countries. MSs must all impose the same duties on imports from third countries. o TFEU 28(1) provides for creation of a customs union with both these aspects: 'The Union shall compromise a customs union . . . [involving] (1) the prohibition between MSs of customs duties . . . (2) a common customs tariff in their relations with third countries'.
Intro to free movement of goods in EU law
FISCAL free movement of goods o Barriers which derive from tax or other financial matters. o Dealt with by Articles 30 and 110.
Article 30 TFEU—prohibits customs duties and CEEs.
Article 110 TFEU- prohibits discriminatory taxation.
Difference between 30 and 110: 30 prohibits charges levied simply because goods have crossed frontier of MS; 110 regulates charges that are levied as a system of internal taxation within the MS.
NON-FISCAL free movement of goods o Articles 34-36. What are 'Goods'?
Commission v Italy (Italian Art/Art Treasures): 'products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions'.
Quite a wide definition. So long as you can value it, and can be subject of commercial transactions.
Eg electricity has been held to be a goods. Also includes objects of artistic, historic, archaeological or ethnographic interest.
Article 30 TFEU: customs duties and CEEs.
Article 30: 'Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.' We have a prohibition on two things. Art 30 prohibits: o (1) Customs duties o (2) Charges having Equivalent Effect to a customs duty ('CEE') It prohibits: all customs duties and CEEs. It has direct effect: Van Gend en Loos, that dealt with a predecessor to article 30, Article 12 EEC, which prohibited increased in customs duties. First thing prohibited. (1) Customs duties o What is a Customs Duty?
o A tariff, however small, specifying the rate of duty to be paid by the importer to the State solely for the reason that the goods are being imported into that State. o Why? Customs duties have effect of making the imported goods more expensive relative to rival domestic goods, thus are an obstacle to free trade. o Woods and Watson (Steiner & Woods EU Law): 'charges levied on goods - whether imports of exports - on the crossing of a border'. o It's a form of taxation. o EU very strict on customs duties: they are prohibited full stop. Made clear in: o Commission v Italy (Italian Art/Art Treasures): purpose of duty is irrelevant, because effect is to hinder trade; it's about the effect-- (in this case the purpose was to preserve Italy's historic, artistic heritage) because effect is to hinder trade. o The purpose is irrelevant—they are prohibited full stop. Why? Because all customs duties hinder the free movement of goods between MSs. Very strict approach. Second thing. (2) Charges having Equivalent Effect ('CEE') o What is a CEE?
o Commission v Italy ('Statistical Levy'):
"any pecuniary charge, however small and whatever its designation and mode of application which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier and which is not a customs duty in the strict sense constitutes a charge having equivalent effect… even if it is not imposed for the benefit of the State, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product." 2
This case concerned a levy imposed by Italy on all imports/exports for purpose of collecting accurate statistical material relating to trade patterns. ECj HELD: the levy was a CEE, thus prohibited. Breaking this down into its material elements, material requirements to be a CEE (from 'Statistical Levy'):
Any pecuniary charge
Imposed unilaterally on either domestic goods (exports) or foreign goods (imports)
By reason of crossing a frontier
And which is not a customs duty in the strict sense
[NB: the charge need not be levied at the border, so long as it is levied by reason of crossing the border]. Irrelevant factors for identifying a CEE (Statistical Levy):
Size of the charge (eg in Statistical Levy was only 10 lire)
Its designation (doesn't matter what label is attached to the charge)
Its mode of application
It is not imposed for the benefit of the State
It is not discriminatory
It is not protective in effect
The product is not in competition with any domestic product Prohibition on CDs and CEEs is general and absolute, no defences: Again, very strict. Any CD's CEEs must be abolished. Justification for this strict approach to CEEs (Statistical Levy): the prohibition on CEEs was intended to supplement the prohibition on customs duties by preventing it from being circumvented and thus increasing its efficiency. The prohibition on customs duties in the treaty is general and absolute, because any pecuniary charge imposed by reason of crossing the frontier constitutes an obstacle to free movement. It follows that, like the prohibition on customs duties, the prohibition on CEEs do not permit any exceptions. Examples of unlawful CEEs Commission v Italy (Statistical Levy): small 10 Lire fee to fund compilation of statistics. A tiny charge. But an unlawful CEE = a pecuniary charge, no matter how small. Strictness illustrated in Sociaal Fonds voor de Diamantarbeiders: Decided at same time as Statistical Levy. A levy on imported diamonds into Belgium to fund social security benefits for diamond works. Unlawful CEE =
even if non-protectionist and product charged is not in competition with any domestic product.
o o o
But 3 charges falling outside Article 30, not prohibited. Listed in Commission v Germany (Animal Inspections).
Article 30 contains an absolute prohibition, any customs duties or CEE is prohibited, regardless of purpose. NO DEFENCES. However, not all charges will be classified as customs duties or CEEs for purpose of Article 30.
Nb: these are not exemptions/exceptions as such. Need to understand the reasons they are not covered.
Commission v Germany ('Animal Inspections'): ECJ ruled a charge will not fall within Article 30 where: o (1) It relates to a general system of internal dues applied systematically and in accordance with the same criteria to domestic and imported products alike. o (2): it constitutes payment 'for a service in fact rendered to the economic operator of a sum in proportion to the service'. o (3): it 'attaches to inspections carried out to fulfil obligations imposed by Community Law'.
1. Internal dues (internal tax):
Alfons Lutticke. Why doesn't it count? Because Article 110 deals with Internal Taxation, not Article 30. Court in Lutticke: charge can't fall under both articles at the same time, because they are each dealing with entirely different systems of taxation. CEEs and internal taxation are governed by two different, mutually exclusive systems, cannot be applied to same case. So if falls under Article 110, cannot fall under Article 30.
2. Payment for Services Rendered (Statistical Levy):
Charge not within Article 30 if consideration for a specific service actually rendered to the importer, and in proportion to that service. It doesn't fall within fiscal levy definition. Must be an actual service.
Rationale: such a charge will not have been unilaterally imposed on goods by reason of them crosier a frontier.
Very vigilant: in Statistical Levy, ECJ states this cannot be used to circumvent restrictions on customs duties and CEEs.
3 basic requirements to be considered a genuine service: o (1) Trader has requested the service, service must be provided at the request of the importer: [[Commission v Belgium (Customs Warehouses)]].
Customs Warehouses: a charge for the temporary storage of goods in warehouses at the request of the importer was not CEE, was a charge for a service. But the levying of the storage charge on goods presented by the importer at the warehouses solely for the purpose of undergoing compulsory customs clearance operations there, was a CEE and not a charge for a service. o (2) Trader specifically benefits from the service
[[Commission v Italy (Statistical Levy) ; and in Bresciani ]]. 4
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